The news: Lululemon athletica’s Americas business is facing its third-straight year of declines in 2026.

Same-store sales in the region are expected to fall between 1% and 3% this year, following a 3% decline in 2025.

How we got here: Once a driving force in the fast-growing athleisure space, lululemon’s influence has faded, in large part due to merchandising weaknesses and competition from more nimble competitors like Alo Yoga and Vuori. The company’s lack of compelling product and continued missteps—including multiple instances of see-through leggings that drew customer complaints—have hurt brand trust and undermined its premium positioning, opening the door for other brands to take share.

Lululemon’s ability to solve that problem—and manage other headwinds like tariffs—has been complicated by its current absence of a permanent CEO, as well as a proxy battle with founder Chip Wilson that is consuming the retailer’s resources and attention at a critical moment.

The company is also weathering a broader slowdown in athleisure sales as shoppers move away from sweatpants toward more structured styles and materials.

The implications: Lululemon’s recent struggles highlight how critical innovation and product quality are to sustaining relevance in the athleisure market. The brand is well aware that it needs to deliver more consistency, quality control, and stronger product development,but executing that strategy could be complicated as Wilson steps up his proxy fight and the CEO search remains unresolved.

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